27 Democrats Push for Liquidity Facility To Aid Mortgage Servicers
Provided by Structured Finance Association
On April 23, Representative Denny Heck (D-WA, 10) led a joint letter to the heads of multiple federal agencies including, Treasury Secretary Steve Mnuchin, Federal Reserve Chairman Jerome Powell, and Federal Housing Finance Agency Director Mark Calabria, urging the federal government to create a liquidity facility that servicers can draw upon to access the cash they need to make their required advances. Members wrote: “We saw in 2008 how failures of mortgage servicers created significant stress on the financial system. Financial stress among mortgage servicers also caused unnecessary foreclosures. There is no reason to risk either of these happening again, especially given the federal government’s good early steps to help homeowners.” The letter went on to state the facility should be available for federally-backed and PLS loans, but that servicers should be required to offer uniform forbearance and modification options as a precondition to accessing the facility. Today’s letter follows an April 15 letter from Senate Banking Committee Ranking Member Senator Sherrod Brown (D-OH) and House Committee on Financial Services Chairwoman Maxine Waters (D-CA) and an April 10 letter signed by 21 Republican members of House Committee on Financial Services which also stressed the need for a liquidity facility to aid mortgage services.
Representative Heck was joined by 26 other signers including all Financial Services Committee New Democrats, Housing Task Force New Democrats, and Washington state delegation New Democrats.
On April 21, SFA applauded action by the FHFA to address servicer liquidity concerns, but also shares the concerns raised in the letter and hopes that FHFA, Treasury, and the Federal Reserve will monitor the uptake rate of this program and provide additional liquidity assistance if it becomes necessary as this economic crisis continues. SFA will continue to advocate for the creation of a liquidity facility for mortgage servicers and keep its members informed of any developments.